As part of The Tax Cuts and Jobs Act (“Tax Act”), expected to be signed by President Trump now that it has been sent for his signature, several favorable changes in tax depreciation have been enacted. This Ryan alert focuses on the bonus depreciation changes.
A few notable provisions include the expansion of bonus depreciation to 100% for property acquired after September 27, 2017 and placed in service before December 31, 2022. In addition, for the first time, bonus depreciation also applies to “used” property purchased by a taxpayer. In other words, the property no longer needs to be first original use to qualify for bonus depreciation as long as it is “new” to the taxpayer.
Please note the following chart that was included in the Conference Agreement for the Tax Act. Companies will need to carefully track when the property was originally acquired for application to the new rules (not just placed in service).
Careful review of the classification of fixed assets from 2017 and before is even more critical with the decrease in tax rates starting in 2018.
To access a recording of Ryan and Bedford’s December 14, 2017 webinar on the benefits of a fixed asset review/cost segregation study for 2017, go to:
TECHNICAL INFORMATION CONTACT:
Greg K. Bryant
Bedford Cost Segregation
603.641.2600 ext. 302